Introduction
Performance management (PM) is a way of evaluating the level of an employee’s performance in workplace. Precisely, PM is “an ongoing communication process, undertaken in partnership between an employee and his/her immediate supervisor that involves establishing clear expectations and understanding several issues” (Bacal, 1999, p. 3).
The commonly used performance management tool is the 360-degree feedback system, also commonly known as multi-rater feedback or multisource assessment because in some cases it involves external organizations to carry out some analysis stages of the assessment.
Duraisingam and Skinner (2005) posit, “Any appraisal system should be relevant and applicable to everyday work, acceptable and fair, and a mutual collaboration between workers and employers” (p. 2) and 360-degree feedback complies with this observation. Just as the name suggests, 360 degrees is a circle with each arc of the circle representing an element of the employee under evaluation who sits at the centre of the circle.
How 360 – Degree Feedback Works
This model operates in a rather simple manner. The evaluating company puts individuals in groups within different departments after which they are required to fill questionnaires or forms answering specific questions as indicated in figure 1 below.
The exercise takes less than twenty minutes; however, it is important to note that the figures used vary depending on the element and content of evaluation; it may be larger or smaller. The participating people maybe one’s peers, managers, or external individuals like suppliers, customers, or stakeholders among others.
Results from the participants are sent to another company, which analyses the information presented in the results to draw conclusions. After this analysis, the analyzed results are sent back to the evaluating company for discussion to chart the way forward and implement the appropriate measures. Nevertheless, this evaluation tool is not perfect thus; it has both merits and demerits.
Example of a 360-Degree Feedback Form
Figure 1: 360 – Degree Feedback. (Chapman, 2005).
Advantages and Disadvantages of this Tool
The advantages of this tool outweigh the disadvantages. The crucial advantage of this tool is, “it provides a wider view of worker’s performance as compared to the other appraisal tools (Atkins & Wood, 2002, p. 875).
Given the nature of many evaluators involved in this exercise coupled with openness created by privacy of information, this method gives all-rounded information about a particular employee. Seifert, Yulk, and McDonald (2003) note, “the 360-degree feedback is more comprehensive than other appraisal methods since they may only need the manager to do the evaluation” (p. 565).
Moreover, this performance management method makes employees believe in the results. The element of believability is tied closely to the fact that many people are involved in the exercise thus eliminating the probability of bias or framing of results. In the light of this revelation, managers make mature and honest decisions and issues like promotions occur on merit not on basis of ‘who knows who’ in an organization.
This tool involves one’s peers thus the individual being evaluated feels confident about any results achieved. This confidence enables one to embark on development strategies to improve on areas where he/she scores poorly. Employees spend more time together compared to the time they spend with managers; therefore, peers are more likely to know an employee better than managers are, and this enables one to honestly appreciate his/her strong and weak points.
Finally, “through 360-degree feedback, employees get the chance to air their views and complain without following the normal bureaucratic complaint chain (Seifert, Yukl, & McDonald, 2003, p. 565). Employees can easily indicate their problems on the form/questionnaire thus communicating directly to the management without necessarily following the normal procedures of communication and this improves organizational communication.
On the other side, the 360-degree feedback has shortcomings just like any other system. Firstly, this system is time consuming. Given the nature of this system to include many people in evaluation, more time is needed to complete the process.
Moreover, the result analysis stage is outsourced to another company and this implies more time too. Smither, London, and Reilly (2005), posit, “This system may yield cynicism and suspicion in workplace” (p. 39). In a case where management fails to implement the proposed recommendations, workers may become cynical and start questioning the same. In other cases, workers may lose motivation if they receive negative comments from their peers or managers.
This calls for absolute honesty, something that may be lacking in many organizations. More importantly, companies “risk revealing confidential information to other companies” (Pfau & Kay, 2002, p. 56). This occurs at the outsourcing stage of evaluation where results are taken to other companies for evaluation.
Effects on Employees
In most cases, this performance management system generates mixed reactions from workers; nevertheless, it all depends on one’s perception.
In a situation where an employee accepts the results and views them positively, they act as a motivator, which enables him/her to improve on the weak areas thus improving productivity and personal development. The 360-degree feedback if implemented well serves as a clear indication of one’s performance status in the indicated areas. As aforementioned, if an employee views the results of this system positively, he/she can improve significantly within a very short period.
Unfortunately, some employees react to the results negatively and resort to finger pointing and this is detrimental to any progress efforts. Consequently, one’s performance may dip radically coupled with low self-esteem and loss of insight. Therefore, the 360-degree feedback system effects on employees depend largely on how one views the results.
Despite the mixed employee reactions on this system, it enables employees to know some crucial issues in workplace. Bacal (1999) notes employees get to know their performance level in workplace, realize the level of authority they posses, feel appreciated when commended for good work done, seize opportunities to develop new skills, and realize resources they have at their disposal in workplace (p. 8).
This form of performance management creates a micromanagement environment, which is healthy in duty delegation and organizational growth.
Effects on Departmental Performance
Effects of performance management on departmental performance are closely linked to that of employee performance. Essentially, departments are made up of individuals and the outcome of the entire department depends largely on the outcome of an individual’s performance.
The only difference between departmental performance and employee performance is; in departmental performance the heat and pressure to perform may lie on departmental heads, as opposed to employee performance appraisal where the pressure to perform lies on an individual.
In the light of these events, effects of performance management using 360-degree feedback depend on how departmental heads perceive the evaluation results. For instance, if a departmental head receives evaluation results positively, he/she will be motivated to create a good working environment that would improve departmental performance.
The opposite is also true; if a departmental head ‘reacts’ to evaluation results negatively, this would create tension in workplace leading to strained relationships between one’s juniors. Therefore, the effects of the 360-degree feedback performance management on departmental performance depend largely on how the departmental heads respond to evaluation results of the same.
Elements of 360-Degree Feedback Performance Management
It is important to note some of the basic elements of this system to establish what it evaluates and what it does not evaluate. 360-degree feedback system covers only those areas that other people can see in an individual like one’s competencies and behaviors. This system is a measure of how other employees perceive and understand a given employee and this explains the inclusion of work ‘feedback’ in the name of the same.
Moreover, this system addresses selected skills like goal setting, planning, and listening. Finally, it addresses subjective areas like leadership effectiveness, one’s character, and teamwork. Taking a closer look into these elements, one realizes that they form the backbone of workplace practices thus qualifying the 360-degree feedback system as one of the good performance management tools in most institutions. On the other hand, this system does not measure some elements as explained next.
This system does not determine one’s performance objectives. This lies in the fact that, the employee alone knows some things like performance objectives hence excluding the possibility of evaluation by other employees. Moreover, this system does not ascertain whether one is meeting elemental job requirements or not, because other employees do not know precisely what one is expected to accomplish.
Finally, this system does not focus on job-specific skills; similarly, cannot be used to measure objective elements like sales quotas and attendance among others. Nevertheless, the elements lacking in this system occur automatically in workplace and do not need to be evaluated per se. For instance, the issue of attendance is taken care of by departmental heads for anyone absent has to explain the reason behind it to his/her seniors.
Improvement Suggestions
Considering the demerits of this system, one might consider using technology to overcome the issue of time consumption. Organizations might consider using online questionnaires to reach the entire organization in a very short time. Designers of these online questionnaires might consider creating space for employees to leave anonymous comments concerning their motivation, frustration, and fears about the organization among other issues that would provide rich source of information.
People feel secure when they leave anonymous feedbacks and this creates honesty; another shortcoming of this system. Concerning the negative perception of results, organizations might consider holding seminars that would inform employees on how not to personalize performance appraisal results for this system almost exclude the element of bias in evaluation.
Conclusion
The 360-degree feedback performance management is one of the widely used tools across organizations. It involves presenting employees with questionnaires to fill in specific details concerning other employees under evaluation. An easy and cheap method reduces chances of bias in evaluation, this system mostly analyses the crucial areas in organization like leadership skills, teamwork and goal setting among others.
Nevertheless, it is a time consuming system even thought this can be overcome by incorporating technology to make it time efficient. Employees might also take evaluation results negatively and this might prove debilitating to one’s performance; nevertheless, it is upon the organization to inform and motivate such employees to focus on the positive side of the results. Generally, this is a good performance management tool and this explains why it has found extensive application across organizations.
Reference List
Atkins, P., & Wood, R. (2002). Self-Versus Others’ Ratings as Predictors Of Assessment Center Ratings: Validation Evidence for 360-Degree Feedback Programs. Personnel Psychology, 55(4); 871–904
Bacal, R. (1999). Performance Management. Madison; McGraw-Hill.
Chapman, A. (2005). 360 – Degree Feedback Template. Retrieved from, The free website resource, <www.businessballs.com>
Duraisingam, V. & Skinner, N. (2005). Performance Appraisal. In N. Skinner, A.M. Roche, J. O’connor, Y. Pollard, & C. Todd (Eds.), Workforce Development Tips (Theory into Practice Strategies): A Resource Kit for the Alcohol and Other Drugs Field. National Centre for Education and Training on Addiction (Nceta), Flinders University, Adelaide, Australia
Pfau, B. & Kay, I. (2002). Does 360-Degree Feedback Negatively Affect Company Performance? Studies Show That 360-Degree Feedback May Do More Harm Than Good. What is The Problem? Hrmagazine. 47 (6); 54–60.
Seifert, C., Yukl, G., & McDonald, R. (2003). Effects of Multisource Feedback And A Feedback Facilitator on the Influence of Behavior of Managers Toward Subordinates. Journal of Applied Psychology, 88(3); 561–569.
Smither, J.W., London, M., & Reilly, R. R. (2005). Does Performance Improve Following Multisource Feedback? A Theoretical Model, Meta-Analysis And Review of Empirical Findings. Personnel Psychology, 58; 33–66